A Comparison of Effective Tax Rates Paid by California Billionaires and Teachers, Nurses, and Doctors

Summary

Billionaires pay low taxes compared to working Californians by keeping their reported income low while their wealth – most of which is unrealized and never taxed – has more than doubled in the last three years alone (growing from a combined 843 billion in 2022 to over $2 trillion in 2025)¹. For this reason, this paper compares effective tax rates against the income of working Californians (teachers, registered nurses, and internal medicine doctors) to the effective tax rates against the wealth and wealth gains of billionaires. The disparity is most striking when comparing California income tax, where working Californians pay anywhere from three to 114 times higher effective tax rates than billionaires, depending on occupation and tax filing status (see Table 5 for a full breakdown). When looking at total taxes (federal and California income taxes, payroll taxes, excluding property and sales tax), the disparity closes slightly but is still striking, with working Californians paying anywhere from 1.6 to 43 times higher effective tax rates than billionaires (see Table 10 for a full breakdown). Due to their unique tax circumstances, the lowest disparity occurs for teachers. If we exclude them from the analysis and replace them with an equivalent salary for a non-teacher worker, the minimum disparity is higher, with working Californians paying effective California income tax rates 5 to 114 times higher than billionaires, and total effective tax rates 5 to 43 times higher than billionaires.

Introduction

This paper compares the effective tax rates paid by California billionaires to that of teachers, nurses, and doctors in California. In making this comparison, this paper will use income as the denominator for teachers, nurses, and doctors, but wealth and/or wealth gain as the denominator for billionaires. The reason for this choice is that income is a wholly inadequate metric by which to measure the wealth gains of California billionaires – unlike for vital middle and upper-middle class professions such as teachers, nurses, and internists. This is simply and strikingly illustrated by the fact that, amongst California’s top four billionaires (centi-billionaires each with $100+ billion in wealth), two of them (Larry Page and Sergie Brin) reported a symbolic $1 income in three of the past seven years (2019, 2020, and 2023). Their true economic income (individual income plus their share of undistributed corporate profits) over the same three years was actually $10.5 billion for Page and $10 billion for Brin.²

Billionaires avoid paying taxes by keeping their reported income low compared to their wealth gains using four main methods: 1) their companies pay low dividends compared to their corporate net profits; 2) they realize low capital gains compared to their large wealth gains—the top four realized $11.8 billion when their wealth increased by $713 billion from 2019-2025 (i.e., only 1.6% of their wealth gains were realized as taxable capital gains); 3) their executive compensation is kept relatively low (a total of $2.3 billion for the top four over the same period); and 4) they donate appreciated stocks to their foundations or donor advised funds, allowing them to reduce taxable fiscal income while benefitting from a double deduction – the gains in the donated appreciated stock are not included in taxable capital gains, but these donations can still be deducted from taxable income (up to a limit of 30% of income with large carry-overs to future years).³

The following sections will compare effective tax rates, including California income tax rates and total government taxes, of California billionaires to professions such as teachers, nurses, and internal medicine doctors. These sections will examine taxes paid by all California billionaires, about 250 individuals, as well as the top four California billionaires – Larry Page, Sergie Brin, Mark Zuckerberg, and Jensen Huang. The reasons for focusing on the top four billionaires are two-fold: they account for 40% of the total CA billionaire wealth (as of July 1, 2026), and, since 97% of their wealth is from the publicly traded corporations they founded and/or still run, SEC public disclosures allow for the precise estimation of their wealth, income, and taxes they pay on that company wealth.⁴

Section 1: California Income Tax – Comparison of Effective Rates

Analyzing California Income Tax in Relation to Wealth of Billionaires

Table 1 below shows the effective California income tax rates for all California billionaires as well as the top four (Larry Page, Sergie Brin, Mark Zuckerberg, and Jensen Huang), using their wealth as the denominator. From 2019-2025 California billionaires paid an average effective California income tax rate of 0.26% of their average wealth of $1.2 trillion dollars. The top four billionaires paid even less in California income taxes – 0.07% of their average wealth of $403 billion dollars. Compare this to the effective CA income tax rates paid by teachers, registered nurses, and internal medicine doctors (using single filing status with no dependents, standard deduction, and gross wages as the denominator) shown in Table 2 – 4.25% (or 5.20% for an equivalent salary earned by a non-teacher – see note a below Table 2 for the explanation of this discrepancy), 6.27%, and 7.95%, respectively. Teachers pay an effective CA income tax rate that is 61 times higher than California’s top four billionaires, while registered nurses pay a rate that is nearly 90 times higher, and doctors pay a rate that is nearly 114 times higher.

The effective CA income tax rate for working Californians is calculated with gross wages as the denominator. This contrasts to Section 2 of this paper, which looks at total federal and state taxes and adds employer-share of payroll taxes to total compensation as the denominator, per CBO practice. Since Section 1 of this paper focuses solely on California income tax, and not federal income and payroll taxes paid by the employee and employer, gross wages are used as the denominator. However, even if the total compensation figure of Section 2 was used as the denominator here, the difference would be small – lowering effective California income tax rates by 0.01 to 0.45 percentage points. This difference is presented in Table 11 in the Appendix.

Table 1: California Income Tax Paid by California Billionaires as Percentage of Wealth⁵

All amounts in nominal $ billions

Note: The 2019–2025 line shows the period average. Wealth figures are from Forbes.

Table 2: California Income Tax by Occupation⁶

Single filer, no dependents, standard deduction, tax year 2025

a The California income tax rate that California public teachers pay is lower than that of other professions making the same salary. This is because teachers are required to contribute 10.205% of salary to CalSTRS (California State Teachers Retirement System). Under the IRC §414(h)(2) employer pick-up, which most districts use, that contribution is excluded from California taxable income. This lowers teachers’ California taxable income to $87,279, against $97,846 for a non-teacher earning the identical salary — the entire source of the gap between the first two rows of this table.

When looking at married-filing-jointly (MFJ) status with two dependents (again, using the standard deduction, and gross wages as the denominator), the gap closes slightly, but teachers, nurses, and doctors still pay massively higher effective California income tax rates compared to centi-billionaires, with a single-earner teacher household paying a rate that is 10 times higher than California’s top four billionaires, a single-earner registered nurse household paying a rate 39 times higher, a two-teacher household paying a rate 54 times higher, and a single-earner internal medicine doctor paying a rate that is 90 times higher.

Table 3: California Income Tax by Occupation⁷

Married filing jointly, two dependent children, standard deduction, tax year 2025

a See note a in Table 2 explaining the source of the discrepancy in teacher vs non-teacher tax rates. In this table, the gap between each teacher row and the non-teacher row directly below it derives from: $81,573 of California taxable income against $92,140 at $103,552 of salary, and $174,557 against $195,692 at $207,104 for a two-teacher household.

Analyzing California Income Tax in Relation to Wealth Gain of Billionaires

From 2019 to 2025 the top four wealthiest Californians paid a total of $1.88 billion in California income tax while their combined wealth increased by over $723 billion. Using wealth gain as the denominator, this represents an effective tax rate amounting to slightly over one-quarter of one percent – 0.26%. Using single filing status with no dependents and gross wages as the denominator, teachers pay an effective CA income tax rate that is 16 times higher than this, while registered nurses pay 24 times higher, and internal medicine doctors pay nearly 31 times higher.

Table 4: California Income Tax Paid by the Top 4 Billionaires as Percentage of Wealth Gain⁸

All amounts in nominal $ millions

Note: This table reports estimates of the California income tax paid by the top four wealthiest Californians on their company stakes in Alphabet (Page and Brin), Meta (Zuckerberg), and Nvidia (Huang). Company wealth makes up 97% of their total Forbes wealth at the end of 2025.

Summary: Comparing Effective California Income Tax Rates Paid by Working Californians and Billionaires

The following table summarizes the information presented in this section, comparing the effective California income tax rate paid by working Californians to the rate paid by California Billionaires. The third and fourth column presents the rates paid by working Californians as multiples of the billionaire rates. The third column presents two pieces of information that round to the same figure: the effective CA income tax rate using wealth as the denominator for all California billionaires, and the effective CA income tax rate using wealth gain as the denominator for the top four billionaires both round to 0.26%. Hence, the multiples against these two benchmarks round to the same figures. The table shows that an internal medicine physician (single filer, no dependents, standard deduction) pays an effective CA income tax rate that is 31 times greater than the rate (against wealth) paid by CA billionaires, 31 times greater than the rate (against wealth gain) paid by the top 4 California billionaires, and 114 times greater than the rate (against wealth) paid by the top 4 California billionaires. This same information is summarized for teachers, non-teachers with the same salary, registered nurses, and internal medicine doctors with two different filing statuses as examples. Across the board, working Californians are paying multifold higher rates than California billionaires – ranging from 3 times higher for single-earner MFJ public school teachers with two dependents, to 114 times higher for single filer internal medicine doctors (depending on whether they are compared against all California billionaires or the top four California billionaires).

Table 5: Effective California Income Tax Rates: Working Californians vs California Billionaires

Worker rates are for tax year 2025; billionaire rates are annual averages, 2019–25

Section 2: Total Taxes (Federal and State) – Comparison of Effective Rates

The following tables show the total taxes, and effective tax rates calculated therefrom, that California billionaires and working Californians pay. The table for California billionaires is adapted from Boll, Jasper, et al. and includes federal individual income tax, California individual income tax, and the corporate taxes (federal, state, and foreign) on the profits of the businesses they own. However, it excludes property and sales taxes that Boll, Jasper, et al. include in their calculations. This was done for comparability with the total taxes that working Californians pay, rather than estimating median property taxes that California teachers, registered nurses, and internal medicine doctors pay, which would’ve required flattening a figure for which there is much variation. It is important to note that this choice leads to a conservative comparison of working Californian’s effective tax rates to that of billionaires. That is, it underestimates the effective tax rates of working Californians compared to billionaires since property and sales taxes are regressive.

The calculations for taxes paid by working Californians includes federal and California income taxes, the employee share of payroll taxes (Social Security, Medicare, and State Disability insurance), and – following the practice of the Congressional Budget Office (CBO) and most economists of treating the employer share of payroll taxes as a cost borne by workers – the employer share of payroll taxes as both a tax burden on the employee and a figure that is to be added to the employee’s income in the denominator (listed as “total compensation” in the tables below).⁹ As was done for the billionaire’s estimates and mentioned above, property and sales taxes are excluded from the calculations. The only departure from the CBO methodology in calculating pretax comprehensive income is the exclusion of employer-paid health insurance premiums, as this figure varies greatly by specific employer. This exclusion raises the calculation of overall tax rates by an estimated 1 to 3 percentage points, depending on occupation and filing status, by lowering the total compensation of working Californians.¹⁰ However, this effect is more than counteracted by the exclusion of regressive property and sales taxes, the exclusion of which is estimated to lower the calculation of overall tax burden by 6-7 percentage points depending on occupation profile.¹¹ Hence, this paper’s estimate of overall effective tax rates of working Californians is still a conservative one by 3 to 6 percentage points, depending on filing status and occupation.

The lower taxes that California teachers pay compared to other professions earning the same salary is even more pronounced when looking at total taxes, since CA public school teachers are exempt from Social Security (OASDI) tax – instead making the previously mentioned mandatory, pre-tax contributions to CalSTRS (and thus reducing their taxable income) – and SDI (State Disability insurance) is elective for public service employers and assumed not withheld. Due to their unique tax circumstances, CA public school teachers are not the best comparison profile, which is why this paper includes profiles for similarly-salaried non-teacher employees.

Table 6 shows total effective tax rates as measured against wealth and wealth gain for California’s top four billionaires. The figures are adapted from Boll et al. and differ from the figures presented in their paper only by excluding property and sales tax (1 percentage point). The table shows that the top four billionaires paid a total effective tax rate of 0.95% measured against annual average wealth and 3.7% against wealth gain, 2019-2025. These figures in the Boll et al. paper, including property and sales tax, are 1.0% and 3.8%, respectively.

Table 6: Wealth, Income, and Total Taxes of the Top 4 CA Billionaires, 2019–2025¹²

All amounts in nominal $ billions, property and sales taxes excluded

The tables below show the total effective tax rates – including individual federal and state income taxes, and employee and employer payroll taxes – paid by California teachers, registered nurses, and internal medicine doctors of various filing statuses. Registered nurses and internal medicine doctors, single-filers with no dependents, pay total effective tax rates of about 36% and 41%, respectively. Teachers as well as non-teachers making the same salary are both presented to highlight the unique tax circumstances of California teachers. A single filer teacher with no dependents pays a total effective tax rate of 18.4% while a non-teacher making the same exact salary pays a tax rate of 33%. Nevertheless, despite this significant difference in tax rates, their take-home pay is nearly identical, $75,172 for teachers and $74,776 for non-teachers. This is due to the teachers’ mandatory pension contribution to CalSTRS, which lowers their taxable income, and their exemption from Social Security tax (employer and employee), federal unemployment tax (FUTA, employer-side), and California SDI (elective). California’s employer-paid UI and Employment Training Tax are excluded as experience-rated and employer-specific. They would add a maximum of about 0.4 percentage points. The teachers’ employee and employer-side pension contributions are excluded from total effective tax rate calculations, per CBO practice, as both are deferred compensation, which will be counted as income and taxed when paid.

Table 7: Effective Tax Rates, Total Taxes – Working Californians, Single Filer, No Dependents

California W-2 employees, tax year 2025, standard deduction applied, all amounts annual

a California public school teachers contribute 10.205% of salary to CalSTRS. Under the IRC §414(h)(2) employer pick-up, which most districts use, that contribution is excluded from federal and California taxable income. CalSTRS members are also outside Social Security, so they pay no OASDI, and SDI is elective for public school employers and assumed not withheld. The pick-up does not reduce Medicare wages, which is why Medicare is identical in the first two columns.

b Below $100,000 of California taxable income the FTB Tax Table is the official method, and it taxes the midpoint of a $100 band rather than exact income. Above $100,000 the rate schedules apply to the exact figure, so the lookup income and taxable income are the same.

c This is the figure the FTB online tax calculator returns — California tax BEFORE credits, the Form 540 line 31 equivalent. Exemption credits come off afterward, on line 32. This is the source of the discrepancy found when checking the rate against the FTB tool.

d The CBO, the Joint Committee on Taxation, the Treasury’s Office of Tax Analysis, the Tax Policy Center, and Saez-Zucman all treat the employer share of payroll tax as borne by the worker and count it in the income measure as well, so the denominator becomes total compensation rather than gross wages. CBO adds the employer share to earnings; Saez-Zucman define pre-tax labor income as “the total labor cost paid by employers for hiring labor including all payroll taxes.” FUTA is charged at California’s 2025 effective rate of 1.8% on the first $7,000 of wages ($126 per employee), including the state’s 1.2% credit reduction for its outstanding federal loan; public school districts are exempt from FUTA and from Social Security, so a teacher’s employer owes only the 1.45% Medicare match. California’s employer-paid UI and Employment Training Tax are excluded as experience-rated and employer-specific. They would add a maximum of about 0.4 percentage points.

e Take-home pay is reported in dollars rather than as a share of anything, because every potential denominator includes a judgement. Two workers on the same $103,552 contract are compared directly: the teacher keeps $75,172 and the non-teacher $74,776. What that comparison does not capture is that their compensation packages differ. A teacher’s district also contributes toward the pension — 19.1% of payroll in 2025-26, of which roughly 8% funds this teacher’s own benefit accrual and the rest services the system’s unfunded obligation — while the non-teacher profiles model no employer retirement benefit at all. Neither the employee nor the employer pension contribution appears in the tax rates above, because both are deferred compensation that will be counted as income, and taxed, when the pension is paid.

Single filers claim no Child Tax Credit and no dependent exemption credits, so those lines are omitted here; they appear in the tables below.

Table 8 below presents total effective tax rates for various occupations with a tax-filing status of married filing jointly with two children, single-earner households. Teachers’ total effective tax rate is about 6%, compared to 20% for non-teachers with the same salary. This is despite nearly identical take-home pays for both profiles of about $88,000-$89,000. The total effective tax rates of single-earner households of registered nurses and internal medicine doctors with the same tax-filing status are about 24% and 32%, respectively.

Table 8: Effective Tax Rates, Total Taxes – Working Californians, Married Filing Jointly, Two Children, One Earner

California W-2 employees, tax year 2025, standard deduction applied, all amounts annual

See identical notes in Table 7 above. Additionally, the Child Tax Credit is $2,200 per qualifying child under 17 and is applied against federal tax before credits. The California dependent exemption credit is $475 per dependent and is subtracted from California tax.

A two-teacher household with two children pays a total effective tax rate of about 16%, compared to an identical household of two non-teachers making the same salary paying a total effective tax rate of about 31%. This discrepancy is despite the fact that the take-home pay of the two households is nearly identical at about $155,000.

Table 9: Effective Tax Rates, Total Taxes – Working Californians, Married Filing Jointly, Two Children, Two Earners

California W-2 employees, tax year 2025, standard deduction applied, all amounts annual

See identical notes to Tables 7 and 8 above. Additionally, both households earn $207,104, split evenly between two earners. Because each earner is separately below the $176,100 Social Security wage base, the non-teacher household pays OASDI on the full amount. A single earner at $207,104 would stop paying at the cap and owe roughly $1,900 less.

Table 10 below presents the total effective tax rates of various profiles of working Californians (against their total compensation) as compared to the total effective tax rates of the top four billionaires against their wealth and wealth gain, most of which is unrealized and never taxed. The right two columns present the total effective tax rates paid by various occupations as multiples of the total effective tax rates paid by the top four billionaires, using both wealth gain (3.7% total effective tax rate, second to last column) and wealth (0.95% total effective tax rate, last column) as the comparison basis. The tables shows that working Californians pay higher total effective tax rates than billionaires across the board – ranging from single-filer teachers with no dependents paying 1.6 times the rate that the top four billionaires pay against their wealth gain (6% compared to 3.7%), to single-filer internal medicine doctors with no children paying 43 times the rate that the top four billionaires pay against their wealth (41% compared to 0.95%).

Table 10: Total Effective Tax Rates: Working Californians vs the Top 4 California Billionaires

All taxes, excluding property and sales taxes. Worker rates are tax year 2025, billionaire rates are annual averages, 2019–25

Appendix

Table 11: California Income Tax Rates — Gross Wages vs. Total Compensation as the Denominator

California W-2 employees, tax year 2025, standard deduction applied, all amounts annual. California income tax only — federal income tax and payroll tax are excluded.

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1. Boll, Jasper, et al. “California Billionaires: Wealth, Taxes, and Wealth Tax Revenue Estimates.” NBER, National Bureau of Economic Research, 25 May 2026, www.nber.org/papers/w35218.↩︎

2. Boll, Jasper, et al. “California Billionaires: Wealth, Taxes, and Wealth Tax Revenue Estimates.” NBER, National Bureau of Economic Research, 25 May 2026, www.nber.org/papers/w35218.↩︎

3. Boll, Jasper, et al. “California Billionaires: Wealth, Taxes, and Wealth Tax Revenue Estimates.” NBER, National Bureau of Economic Research, 25 May 2026, www.nber.org/papers/w35218.↩︎

4. Ibid.↩︎

5. Table adapted from Boll, Jasper, et al. “California Billionaires: Wealth, Taxes, and Wealth Tax Revenue Estimates.” NBER, National Bureau of Economic Research, 25 May 2026, www.nber.org/papers/w35218.↩︎

6. Salary sources: teacher — California Department of Education J-90 data, 2024–25 statewide average ($103,552) https://www.cde.ca.gov/ds/fd/cs/index.asp. Registered nurse and internal medicine physician — BLS Occupational Employment and Wage Statistics, California, 2025 https://data.bls.gov/oes/#/home. Tax parameters — California Franchise Tax Board, 2025 Form 540 booklet, tax table, and rate schedules.

   Effective CA income tax rate is California personal income tax divided by gross annual salary. California tax is net of the $153 personal exemption credit (which is the source of discrepancy when using the Franchise Tax Board calculator to estimate taxes https://www.ftb.ca.gov/file/personal/tax-calculator-tables-rates.asp). Effective CA income tax rate is computed using the FTB Tax Table below $100,000 of taxable income and the 2025 rate schedules above it, per FTB instructions. Federal income tax and payroll taxes are excluded.↩︎

7. Effective rate is California personal income tax divided by gross annual household salary. California tax is net of $1,256 in exemption credits — the $306 joint personal exemption credit plus $475 for each of the two dependents. Computed using the FTB Tax Table below $100,000 of taxable income and the 2025 rate schedules above it, per FTB instructions. Federal income tax and payroll taxes are excluded, as are the federal Child Tax Credit and any refundable credits.

   Salary sources: teacher — California Department of Education J-90 data, 2024–25 statewide average ($103,552); the two-teacher household is twice that figure. Registered nurse and internal medicine physician — BLS Occupational Employment and Wage Statistics, California, 2025. The registered nurse and physician rows are single-earner households. Tax parameters — California Franchise Tax Board, 2025 Form 540 booklet, tax table, and rate schedules.

   ↩︎

8. Table adapted from Boll, Jasper, et al. “California Billionaires: Wealth, Taxes, and Wealth Tax Revenue Estimates.” NBER, National Bureau of Economic Research, 25 May 2026, www.nber.org/papers/w35218.↩︎

9. “Historical Effective Federal Tax Rates: 1979 to 2005,” December 2007, Congressional Budget Office https://www.cbo.gov/sites/default/files/110th-congress-2007-2008/reports/12-11-historicaltaxrates.pdf
   “How are federal taxes distributed?” Tax Policy Center. https://taxpolicycenter.org/briefing-book/how-are-federal-taxes-distributed
   Saez, E., & Zucman, G. (2023). Distributional Tax Analysis in Theory and Practice: Harberger Meets Diamond-Mirrlees. https://doi.org/10.3386/w31912↩︎

10. Estimates arrived at by using California Health Care Foundation’s (CHCF) California Health Benefits Survey 2025 figures for average annual premiums in California ($10,033 for single coverage, $28,397 for family coverage), with workers contributing 14% of the single coverage premiums and 27% of the family coverage premiums (hence, employer share estimates are $8,628 and $20,730, respectively).↩︎

11. “California: Who Pays?,” 7^th edition, Institute on Taxation and Economic Policy https://itep.org/california-who-pays-7th-edition/↩︎

12. Table adapted from Boll, Jasper, et al. “California Billionaires: Wealth, Taxes, and Wealth Tax Revenue Estimates.” NBER, National Bureau of Economic Research, 25 May 2026, www.nber.org/papers/w35218. This table differs from the one in the cited article by excluding property and sales taxes from the estimations.↩︎